Policy Paper: Cabinet Office and HM Treasury Small and Medium-Sized Enterprise (SME) Action Plan: 2025 to 2028

Why It Matters

Boosting SME participation in government procurement can accelerate growth for thousands of British firms and improve value for taxpayers through competition. The initiative also positions the UK as a more SME‑friendly market, attracting innovation and regional investment.

Key Takeaways

• Targets increase SME government spend to 30% by 2028
• Simplifies registration for small suppliers in public contracts
• Cuts compliance costs through streamlined reporting requirements
• Introduces transparent procurement dashboards for real‑time monitoring
• Encourages regional innovation hubs to connect SMEs with ministries

Pulse Analysis

The United Kingdom’s public‑sector procurement has traditionally been dominated by large contractors, leaving many small and medium‑sized enterprises on the periphery. Recent analyses show that SMEs account for less than 15% of total government spend, despite evidence that they can deliver comparable quality at lower cost. By publishing a dedicated action plan, the Cabinet Office and HM Treasury acknowledge this gap and aim to reshape the procurement landscape, aligning it with broader economic policies that prioritize resilience and inclusive growth.

The 2025‑2028 SME action plan outlines concrete targets, including a goal to lift the proportion of government spend with SMEs to roughly 30% by the end of the period. To achieve this, the plan introduces a simplified digital onboarding portal, reduces paperwork through a risk‑based compliance framework, and mandates transparent spend dashboards for each department. These steps are designed to cut transaction costs, shorten award timelines, and give smaller firms clearer visibility into upcoming opportunities, thereby leveling the playing field against entrenched large suppliers.

For businesses, the policy translates into actionable opportunities: early engagement with procurement teams, participation in regional innovation hubs, and access to data that can inform bidding strategies. Economically, higher SME involvement is expected to stimulate job creation, diversify supply chains, and generate fiscal efficiencies for the taxpayer. As the UK seeks to reinforce its post‑Brexit competitiveness, the success of this action plan could become a benchmark for other nations aiming to integrate SMEs into public procurement ecosystems.